Higganbotham v. Oklahoma ex rel. Okla. Transp.

• Decision Date: 06 May 2003
• Docket Number: No. 02-6193.,02-6193.
• Citation: 328 F.3d 638
• Parties: A.E. HIGGANBOTHAM, as a resident taxpayer, citizen and voter of the State of Oklahoma, and on behalf of all other resident taxpayers, citizens and voters of the State of Oklahoma, Plaintiff-Appellant, v. State of OKLAHOMA, ex rel., OKLAHOMA TRANSPORTATION COMMISSION and Oklahoma Department of Transportation; and United States of America, ex rel., U.S. Department of Transportation; and its Federal Highway Administration, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 638

328 F.3d 638

A.E. HIGGANBOTHAM, as a resident taxpayer, citizen and voter of the State of Oklahoma, and on behalf of all other resident taxpayers, citizens and voters of the State of Oklahoma, Plaintiff-Appellant, v. State of OKLAHOMA, ex rel., OKLAHOMA TRANSPORTATION COMMISSION and Oklahoma Department of Transportation; and United States of America, ex rel., U.S. Department of Transportation; and its Federal Highway Administration, Defendants-Appellees.

No. 02-6193.

United States Court of Appeals, Tenth Circuit.

May 6, 2003.

Robert T. Keel, Oklahoma City, OK, for Plaintiff-Appellant.

W.A. Drew Edmondson, Attorney General, and Lynn C. Rogers, Assistant Attorney General, State of Oklahoma, and Robert G. McCampbell, United States Attorney, and K. Lynn Anderson, Assistant United States Attorney, for Defendants-Appellees.

Before TACHA, Chief Judge, SEYMOUR and EBEL, Circuit Judges.

EBEL, Circuit Judge.

A.E. Higganbotham filed a complaint in the United States District Court for the Western District of Oklahoma seeking declaratory and injunctive relief on behalf of himself and "all other resident taxpayers, citizens and voters of the State of Oklahoma and United States of America." The complaint challenged the constitutionality of 23 U.S.C. § 122, which authorizes the federal government to reimburse states for the costs associated with the issuance of certain bonds, and of Oklahoma House Bill No. 2259, which allegedly deprives the plaintiff of the right to vote on the issuance by Oklahoma of certain bonds. The district court dismissed the complaint as against the United States because the plaintiff lacked standing to bring the suit. The court dismissed the complaint as against Oklahoma because the suit against the state is barred by the Eleventh Amendment of the U.S. Constitution. The plaintiff appeals that decision, and we AFFIRM.¹

BACKGROUND

Section 122 of Title 23 of the United States Code provides assistance to states by providing for federal subsistence to state transportation projects. The section states that

the Secretary [of Transportation] may reimburse a State for expenses and costs incurred by the State or a political subdivision of the State and reimburse a public authority for expenses and costs incurred by the public authority for —

(1) interest payments under an eligible debt financing instrument;

(2) the retirement of principal of an eligible debt financing instrument;

(3) the cost of the issuance of an eligible debt financing instrument;

(4) the cost of insurance for an eligible debt financing instrument; and

(5) any other cost incidental to the sale of an eligible debt financing instrument (as determined by the Secretary).

23 U.S.C. § 122(b).

In May and June 2000, the Oklahoma legislature passed and the governor signed a bill authorizing the construction of new highways and the improvement of existing highways. 2000 Okla. Sess. Law Serv. Ch. 401 (H.B.2259) (West) [hereinafter H.B. 2259]. Pursuant to this law, the Oklahoma Department of Transportation was authorized to issue "Grant Anticipation Notes" to fund highway construction programs. H.B. 2259 § 2001(E). The state authorized the issuance of $799 million of such bonds with the debt to be paid by federal grants received pursuant to 23 U.S.C. § 122.

On November 5, 2000, the plaintiff filed a complaint challenging the constitutionality of 23 U.S.C. § 122 and H.B. 2259. The plaintiff alleged that § 122 violates the Spending Clause of the Constitution, art. I, § 8, cl. 1, because it authorizes payment by the federal government of state debts rather than federal obligations. The plaintiff alleged that H.B. 2259 denied him the right to vote on the state bond issue, a right he claimed under the Oklahoma Constitution, thereby violating the First, Fifth, and Fourteenth Amendments of the Constitution.

The parties filed cross-motions for summary judgment, and the plaintiff filed a motion for recusal of the assigned judge, Judge Tim Leonard. The district court denied the recusal motion.

On April 26, 2002, on the same day that the district court denied the recusal motion, the court entered an order asking the parties to file additional briefing. The court directed the parties "to file simultaneous briefs addressing whether plaintiff has standing and whether this matter presents a case or controversy." On June 5, 2002, after reviewing the parties' submissions, the district court entered an order dismissing the case.

The district court relied on two grounds in dismissing the complaint. First, the court concluded that the plaintiff did not have standing to sue the federal government to challenge the constitutionality of § 122. Relying on the Supreme Court's jurisprudence limiting "taxpayer standing," in particular the reasoning of Flast v. Cohen, 392 U.S. 83, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968), the district court concluded that the plaintiff lacked "the personal stake and interest that impart the necessary concrete adverseness to such litigation so that standing can be conferred on the taxpayer qua taxpayer consistent with the constitutional limitations of Article III." Order of June 5, 2002, at 6 (quoting Flast, 392 U.S. at 101, 88 S.Ct. 1942) (internal quotation marks omitted).

Second, the district court dismissed the case against Oklahoma because it found that the suit was barred by the Eleventh Amendment. The district court said that "[a]s plaintiff has sued the State of Oklahoma and two of its agencies, there is no doubt that the Eleventh Amendment applies," and "the record reveals no voluntary action by the state defendants that would constitute waiver of its Eleventh Amendment immunity." Order of June 5, 2002, at 7.

For these two reasons, the district court dismissed the case. The plaintiff timely filed a notice of appeal and asks us to reverse both the dismissal of the case and the district court's order denying the motion for recusal.

DISCUSSION

I. DISMISSAL OF THE COMPLAINT

A. Standing to Sue the Federal Government

The plaintiff brings this action in his capacity as "a resident taxpayer, citizen and voter of Oklahoma County, State of Oklahoma." His claim against the federal government is that the "U.S. Congress has no power, under the U.S. Constitution `spending clause' of Art. I, § 8, cl. 1 or other Constitutional authority, to enact 23 U.S.C. § 122 ... as to possible future federal highway grant money to pay off State debt bonds." We review questions of standing de novo, Roe No. 2 v. Ogden, 253 F.3d 1225, 1228 (10th Cir.2001), and we conclude that the plaintiff does not have standing to bring this suit either as a taxpayer, citizen, or voter.

Since its decision in Frothingham v. Mellon, 262 U.S. 447, 43 S.Ct. 597, 67 L.Ed. 1078 (1923), the Supreme Court has taken a restrictive view of the circumstances under which a taxpayer will have standing to challenge congressional action taken pursuant to the Spending Clause. See, e.g., United States v. Richardson, 418 U.S. 166, 174-75, 94 S.Ct. 2940, 41 L.Ed.2d 678 (1974) (rejecting standing of taxpayer plaintiff in suit seeking disclosure of C.I.A. expenditures); Valley Forge Christian Coll. v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 482, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982) (rejecting taxpayer standing where plaintiff challenged transfer of federal property to religious college). Frothingham established the general rule that "the expenditure of public funds in an allegedly unconstitutional manner is not an injury sufficient to confer standing, even though the plaintiff contributes to the public coffers as a taxpayer." Valley Forge, 454 U.S. at 477, 102 S.Ct. 752. The Supreme Court thus far has recognized only one exception to this rule: a taxpayer may have standing to challenge Congressional action taken pursuant to the Spending Clause when the action allegedly violates the Establishment Clause of the First Amendment. Flast, 392 U.S. at 105-06, 88 S.Ct. 1942.

In Flast, the Court established a two-pronged test to determine whether a taxpayer has standing to sue. Id. at 102-03, 88 S.Ct. 1942. First, because the injury a taxpayer alleges is his liability for taxes, the Court held that "a taxpayer will be a proper party to allege the unconstitutionality only of exercises of congressional power under the taxing and spending clause of Art. I, § 8, of the Constitution." Id. at 102, 88 S.Ct. 1942. Second, "the taxpayer must show that the challenged enactment exceeds specific constitutional limitations imposed upon the exercise of the congressional taxing and spending power and not simply that the enactment is generally beyond the powers delegated to Congress by Art. I, § 8." Id. at 102-03, 88 S.Ct. 1942. "When both [requirements] are established, the litigant will have shown a taxpayer's stake in the outcome of the controversy and will be a proper and appropriate party to invoke a federal court's jurisdiction." Id. at 103, 88 S.Ct. 1942. In Flast, the plaintiff satisfied the first prong by challenging Congress's allocation of federal funds under the Elementary and Secondary Education Act of 1965. Id. at 85, 103, 88 S.Ct. 1942. She satisfied the second prong by alleging that the expenditure violated the Establishment Clause because some of the funds were being used to support religious schools. Id. at 103, 88 S.Ct. 1942. With respect to the second prong, the Court held that the Establishment Clause "operates as a specific constitutional limitation upon the exercise by Congress of the taxing and spending power conferred by Art. I, § 8." Id. at 104, 88 S.Ct. 1942.

The plaintiff in the instant case has met the first requirement for standing as a taxpayer. In attacking payments by the federal government to the states made pursuant to 23 U.S.C. § 122, he is challenging expenditures by Congress under its Art. I, § 8, power to spend for the general welfare.² The question is whether he satisfies the second requirement of identifying a "specific...